What financial statements are property, plant, and equipment reported on, and how?
The non-current asset section of the balance sheet reports the property, plant, and equipment.
The statements that report the summary of the financial transactions that occurred during a specified period are known as financial statements. It reports revenue, expenses, assets, and liabilities.
The business entity's property, plant, and equipment are reported in the financial statement known as a balance sheet. These are reported after adjusting the accumulated depreciation of the respective asset.
Recording partial-year depreciation and sale of an asset On January 2, 2016, Pet Spa purchased fixtures for $37,800 cash, expecting the fixtures to remain in service for six years. Pet Spa has depreciated the fixtures on a straight-line basis, with $9,000 residual value. On May 31, 2018, Pet Spa sold the fixtures for $24,200 cash. Record both depreciation expense for 2018 and sale of the fixtures on May 31, 2018
Handling acquisition of patent, amortization, and change in useful life Melbourn Printers (MP) manufactures printers. Assume that MP recently paid $200,000 for a patent on a new laser printer. Although it gives legal protection for 20 years, the patent is expected to provide a competitive advantage for only eight years
1. Assuming the straight-line method of amortization, make journal entries to record
(a) The purchase of the patent and
(b) Amortization for the first full year.
2. After using the patent for four years, MP learns at an industry trade show that another company is designing a more efficient printer. On the basis of this new information, MP decides, starting with Year 5, to amortize the remaining cost of the patent over two remaining years, giving the patent a total useful life of six years. Record amortization for Year 5.
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